This Week’s Highlights:
- Home buying mortgage rates see a slight decline
- Refinancing rates saw the opposite fate
- What’s up with luxury condo new builds?
Mortgage rates are slightly down for new home sales
Mortgage rates are surprisingly down, despite the slow increase over the past several months. The weekly mortgage rates data reported a 2.97% rate, on a $200,000 30-year-fixed with 20% down. That’s only if you’re willing to pay seven tenths of a point to get that rate, which is $1,400. In addition to the hard cost for appraisal title, insurance, closing credit report, etc.
The good news? Accunet could deliver a 2.99% rate on that same $200,000 loan with 20% down without needing to pay the $1,400. That would put the annual percentage rate (APR) on that is 3.002%.
What is APR?
APR is an attempt to measure the cost of your mortgage, in addition to the actual interest on the borrowed money. So, in other words, what other things would you pay for to get this mortgage? The best examples of that would include the cost of the closing agent, mortgage insurance, etc.
Here’s the problem though: APR takes all those upfront costs and does not include the cost of the appraisal or title insurance. If you’re paying the seven tenths of a point as quoted in the rates data, it slathers that $1,400 over the entire 30 years of your mortgage term. It’s rather misleading because it’s taking those upfront costs and thinning them out far too long.
Learn how to get the best rate for you with Accunet Mortgage and our team of refinance experts—click here to get started.
Refinancing rates are slowly increasing
While new home mortgage rates are down, refinancing rates are a different situation. Why? Because Fannie and Freddie are chiseling the American public. It’s a money grab. They say it’s because they’re worried about more foreclosures due to COVID, but we’re not convinced this is really a worry. Now that we have the vaccine, the latest economic forecast is for the economy to grow 6.5%. Unemployment is expected to get back down to 4.25%. Does this really indicate foreclosures are going to increase? No, I don’t think so. Yet Fannie Mae and Freddie Mac are fleecing lenders in the public by pretending that refinances are more risky.
Now, if you bought a home when we opened our doors back in 1999, when rates were a whopping 8.75%, then yeah, you’re in a good spot to refinance because rates are certainly lower than that. Other than that, there are plenty of other refinancing options that we could look at to find the best one for your wallet, despite the slight increase in recent rates.
Buying a new home? Start here so you know what to expect from the process!
The fate of luxury condos
We got a text question on the Accunet Mortgage Talk and Text Line asking if we thought that developers who are currently building luxury apartments or condos likely to pivot and start doing single family detached homes, given the super high demand for housing.
My answer is decidedly “No.” Why? Well, they’re simply not the same. Condo developers are doing high density stuff right now. And if the developers are doing them to own them, what they’re creating is an annuity stream. If you build and then retain a luxury apartment, you’re getting the rental income on that. That is a different play than constructing homes and selling them at a profit that’s one-and-done. We don’t see condo or apartment developers going away any time soon.
Lock in your rock-solid pre-approval before rates continue to rise—click here to get started. A major client win!
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